Increasing reliance on electronic payment creates dangers for consumer protection, privacy, political interference and competition, says Jem Bendell
Cash is no longer king. The show that the total number of cashless transactions overtook ones using cash for the first time in the UK in 2014. The change was no doubt boosted by new technology 鈥� payment apps for phones and contactless systems that allow you to just wave a card or a phone over a terminal.
It鈥檚 convenient, but are there are any downsides to a cashless society? Banks have proved to be poor guardians of the public interest and tech firms disrespectful of our privacy, so it is right to raise this question. Our recent research for the massive open online course at the University of Cumbria, UK, identified four key concerns.
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First was consumer protection. E-payment systems are becoming akin to utilities such as water, in that they are indispensable to everyday life. What will happen when someone is 鈥渃ut off鈥� from a payment system? With such power comes a need for responsibility, so new regulations to safeguard us will be needed.
Then there are anti-competitive issues. worldwide, and well over 90聽per cent in many countries. This represents a hitherto unimaginable degree of control over the means of payment. Policies should be adopted to diversify this market or to break up these oligopolies.
E-payment is also data rich, so privacy is another key concern. Individual freedoms should only ever be given up knowingly. There was no such consent to mass surveillance, and recognised by the United Nations. So, at a time when a broad swathe of our general communications data is routinely exchanged by spy agencies, a big question mark hangs over the as the e-payment revolution rolls on.
And then we come to the most worrying concern in a cashless society 鈥� the weaponisation of payment systems. Those in political power can and have told payments firms or banking networks to switch off access for entities they want to damage.
For example, after WikiLeaks continued to embarrass the US by releasing diplomatic cables on the conduct of US wars, MasterCard, Western Union and PayPal responded to requests from a small number of US politicians in 2011 to , halting donations, even in Europe.
In 2012, the EU ordered the Belgium-based network SWIFT 鈥� which enables secure transactions between banks the world over 鈥� to amid a stand-off over nuclear technology. It also faced pressure to block Russian banks.
Cash may be clumsy, but replacing it entirely means we need to have more choices and be protected from potential abuse. Otherwise we risk becoming prisoners of our payment systems. That must not happen.
